Following the transposition into the national legislation of the Council Directive 2008/8/EC of February 12th, 2008, of amending the Directive 2006/112/EC regarding the place of providing services, starting with January 01st, 2010, it was changed the VAT regimen applicable to services. The main novelty is represented by the tax regimen applicable to the intra-community providing services and the intra-community acquisitions of services, tax system that we intend to present it throughout this material.intra-community services, VAT, natural person

Radu BUZIERNESCU

English

Research Papers in Economics

Year IX, No. 11/2010                                                                                                191 
 
1. Foreword 
 
  Until  January  01
st,  2010,  for 
determining  the  place  of  the  services, 
and  therefore  of  settling  the  place  of 
taxation of a service in terms of VAT, one 
general rule applies, that the place of the 
service  is  considered  to  be  the  place 
where  the  supplier  is  established.  From 
this  rule,  there  were  regularized  a 
number of exceptions, settling the place 
of the  services, in relation to the type of 
service,  either  the  place  where  the 
headquarters  of  the  beneficiary  was 
located, or the place where the services 
were actually rendered, and so on.  
 
2. Intra-community providing services 
 
  Intra-community  providing 
services  are  the  services  for  which  the 
provisions of the art. 133 paragraph (2) of 
the Tax Code apply, which are provided 
by  providers  established  in  Romania  to 
beneficiaries  taxable  persons,  who  are 
established within the Community. 
  According  to  the  art.  133 
paragraph (2), the place of the service is 
the  place  where  the  beneficiary  taxable 
person  has  established  his  
business/where the taxable person has a 
fixed headquarters where it receives the 
services (consumer site).  
  This  implies  that,  if  the  provider 
is  from  Romania  and  the  service  is 
provided  to  a  beneficiary  established  in 
the Community / a fixed headquarters of 
the Community, the place of the service 
is not in Romania, therefore it will not be 
taxed from teh point of view of the VAT in 
Romania. 
  But  if  the  provider  is  from  the 
Community and the service is provided to 
a taxable person established in Romania, 
and  therefore,  it  will  be  a    taxable 
transaction  in  Romania,  which  may  be 
exempted or taxable. If the transaction is 
taxable, the tax payment will be made by 
deduction. 
  The  provisions  of  the  art.  133 
paragraph (2) represent the general rule 
for the situation in which the provider and 
the  beneficiary  are  taxable  persons. 
Basically,  if  both  parties  are  taxable 
persons  established  within  the 
Community,  this  category  includes  all 
types of providing services, except those 
covered by the art. 133 paraph (4) which 
contains special rules for determining the 
place  of  the  services.  The  excepted 
services are: 
  a)  the  services  provided  in 
connection with the immovable property, 
including  the  services  provided  by  
experts  and  estate  agents,  of  
accommodation in the hotelier area  or in 
areas  with  similar  function,  such  as 
holiday  camps  or  site  improved  for 
camping, of granting the right of user of 
the immovable property, for training and 
coordination  services  of  construction 
works, such as the services provided by  
architects  and  by  the  companies 
providing  the  on-site  supervision;  
  b)  the  passenger  transport 
services;  
  c) the main and auxiliary services 
related  to  cultural,  artistic,  sporting, 
scientific,  educational,  entertainment 
activities or similar activities such as fairs 
and  exhibitions,  including  the  services 
 
NEWS ON VAT REGIME APPLICABLE TO INTRA-
COMMUNITY SERVICES 
 
Assoc. Prof. Radu BUZIERNESCU, PhD 
University of Craiova 192                                                                        Finance – Challenges of the Future 
provided  by  the  organizers  of  these 
activities; 
  d)  the  restaurant  and  catering 
services,  except  for  those  physically  
carried out on board ships, on aircraft or 
trains  during  a  part  of  a  passenger 
transport operation performed within the 
Community; 
  e)  the  short-term  rental  of  a 
means  of  transport.  Short-term  means 
the continuous possession or use of the 
means  of  transport  for  a  period  of 
maximum  30  days  and,  for  the  marine 
craft, for a period of maximum 90 days; 
  f)  the  restaurant  and  catering 
services  actually  provided  on  board 
ships, on aircraft or trains during a part of 
a  passenger  transport  operation 
performed within the Community; 
  Therefore,  in  a  non-exhaustive 
list, the services for which the place shall 
be determined according to the art. 133 
paragraph  (2)  are:  intangible  services, 
freight  services,  services  consisting  of 
the works executed on movable property, 
long-term rental and leasing of means of 
transport, and so on.  
 
3. Special conditions for the 
application of the provisions of the 
art. 133 paragraph 2 of the Tax Code 
    
A. For those services provided by taxable 
persons  established  in  Romania,  when 
the  beneficiary  is  a  taxable  person 
established  in  another  Member  State, 
and  the  service  is  provided  to  the 
headquarters  of  his  business  or  a  fixed 
headquarters, located in a Member State 
other  than  Romania,  the  provider  must 
prove  that  the  beneficiary  is  a  taxable 
person  and  that  it  is  established  within 
the Community.  
  It is considered that this condition 
is met  when  the  beneficiary  notifies  the 
provider of one of his business address, 
or,  where  appropriate,  of  a  fixed 
headquarters, of the Community, as well 
as a valid VAT code assigned by the tax 
authorities  of  another  Member  State, 
including  for  the  non-taxable  legal 
persons  who  are  registered  for  VAT 
purposes.  
  It is considered that the provider 
has acted in good faith in determining the 
fact  that  his  beneficiary  is  a  taxable 
person, when it obtained the confirmation 
of the validity of the tax code assigned to 
his  beneficiary  by  the  tax  authorities  of 
another  Member  State  through  the 
security  procedures  existing  within  the 
Community.    
  If  the  beneficiary,  who  is 
established  in  another  Member  State, 
other  than  Romania,  does  not 
communicate a valid tax code, and / or 
the  provider  does  not  obtain  the 
confirmation of the validity of his client's 
tax  code,  it  will  be  considered  that  the 
provision  of  services  is  performed  by  a 
non-taxable  person,  applying  the  other 
rules provisioned by the 133, depending 
on the type of service. 
  If subsequent to the issuance of 
the  invoice  by  the  provider,  the 
beneficiary shall provide a valid tax code 
assigned by the tax authorities of another 
Member State, the provider will apply the 
provisions of the art. 133 paragraph (2) of 
the  Tax  Code,  respectively  that  will 
consider  that  the  transaction  is  not 
taxable in Romania, being taxable to the 
place  where  the  beneficiary  is 
established, if the beneficiary can prove 
that  he  had  the  capacity  of  taxable 
person when the tax became chargeable. 
The  proof  consists  of  a  formal 
confirmation  of  the  tax  authority  of  the 
Member State in which the beneficiary is 
established.  Regarding  the 
reconsideration of the place of providing 
services,  the  provider  applies  the 
provisions  of  the  Art.  159  of  the  Tax 
Code  (concerning  the  correction  of  the 
invoices by cancellation)
1. 
 
B.  If  a  provider  established  in  Romania 
provides services covered by the art. 133 
paragraph (2) of the Tax Code by: 
                                                 
1 Item 13 paragraph (9) of the G.D. 44/2004; 
 Year IX, No. 11/2010                                                                                                193 
  a) a taxable person who has his 
business place outside Romania, but he 
is  established  in  Romania  by  fixed 
headquarters/locations,  it  will  be 
considered  that  the  place  of  providing 
services  is  the  place  where  the 
beneficiary has established his business 
or,  where  appropriate,  a  fixed 
headquarters located situated in another 
state,  if  the  beneficiary  may  present 
sufficient  evidence  to  the  provider  to 
demonstrate  that  these  services  were 
provided  to  his  business  place,  or  to  a 
fixed headquarters established in another 
state,  and  not  to  the  fixed 
headquarters/locations in Romania; 
  b)  a  taxpayer  who  has  his 
business  place  in  Romania,  but  it  is 
established  outside  Romania  by  fixed  
headquarters/locations,  it  will  be 
considered  that  the  place  of  providing 
services  is  the  fixed  headquarters  tow 
which  the  services  are  provided,  if  the 
beneficiary  can  present  sufficient 
evidence to the provider to demonstrate 
that these services were not provided to 
his business place in Romania, but to the 
fixed  headquarters/locations  outside 
Romania.  
  The  evidences  that  the 
beneficiary  can  submit  to  demonstrate 
that the services are actually provided to 
his  business  place  or  to  a  fixed 
headquarters  may  include:  the  contract 
and  /  or  the  order  form  which  identifies 
the headquarters receiving the services, 
the fact that the respective headquarters 
is the entity that pays for those services 
or  the  service  cost  is  actually  borne  by 
the  respective  entity,  the  nature  of  the 
services allows to identify, in particular, of 
the  headquarters/locations  to  which  the 
service  is  provided,  any  other  relevant 
information  for  determining  the  place  of 
provision
2.  
   
C.  For  the  services  for  which  the 
provisions of the art. 133 paragraph (2) of 
the  Tax  Code  apply,  provided  by  a 
                                                 
2 pct. 13 alin. (4) din H.G. 44/2004; 
 
taxable  person  established  in  Romania  
to  a  beneficiary,  taxable  person, 
established  in  another  Member  State 
who provided to the provider a valid tax 
code, to determine whether the provided 
services are used for personal purposes 
or  for  personal  use  of  the  taxable 
person's  employees,  the  provider  will 
consider the nature of rendered services. 
Only  when  due  to  the  nature  of  the 
provided services it is assumed that they 
could  be used for private  purposes, the 
provider will require a statement from the 
customer or for the purpose for which the  
services  will  be  used.  If  from  this 
statement arises that the beneficiary will 
not  use  these  services  for  private  or 
personal  use  of  the  employees,  it  is 
considered  that  the  provider  acted  in 
good faith regarding the determination of 
the place of providing services and he is 
exempted from any further liability to pay 
the tax. When the service is to be used 
by  the  beneficiary  partly  for  personal 
purposes  or  for  personal  use  of  the 
taxable  person's  employees  and  partly 
for the purpose of the economic activity, 
or  wholly  for  private  purposes  or  for 
personal  use  of  the  taxable  person's 
employees, the provision of that service 
shall be treated as being made in relation 
to a non-taxable person. Concerning the 
use  of  each  service  to  determine  the 
place of providing services, there will be 
taken  into  account  only  the 
circumstances  prevailing  at  the  time  of 
the  service  provision.  Any  subsequent 
amendment of the use of that service by 
the  beneficiary  for  the  purposes  of  this 
paragraph,  will  not  have  consequences 
for  determining  the  place  of  provision, 
unless they can prove the abuse of law
3. 
The  intra-community 
procurements  of  services  are 
procurements  of  services  for  which  the 
taxable person is liable to pay the tax in 
terms of the art. 150 paragraph (2) of the 
Tax Code, which are provided by taxable 
                                                 
3Item 13 paragraph (10) of the G.D. 44/2004. 
 194                                                                        Finance – Challenges of the Future 
persons  established  within  the 
Community.  
 
4. Determination rules of the tax 
exigibility for the intra-community 
service provision/intra-community 
procurements of services 
 
  Unlike  the  exempted  intra-
community  deliveries  and  the  intra-
community  procurements,    which  have 
special  rules  for  determining  the  tax 
exigibility, for the intra-community service 
provision there are not regulated specific 
rules,  but  there  are  applied  the  rules 
established  for  the  exigibility  of  the 
internal  service  provision,  respectively 
the art. 134 ind. 1 and the art. 134 ind. 2 
of the Tax Code.  
  Thus, as a general rule, the tax is 
exigible on the date when the generative 
event  occurs.  By  exception,  the  tax  is 
exigible on the date of issuing an invoice, 
before the date on which the generative 
event occurs or on the date on which the 
advance  payment  is  received,  for  the 
advance payments made before the date 
on which the generative event occurs.  
  Regarding  the  generative  event, 
it  occurs  on  the  date  of  the  service 
provision, except for certain services for 
which  the  generative  event  occurs  at 
another time.  
  The service provisions leading to 
successive  deductions  or  payments, 
such  as  construction  and  assembly 
services,  consultancy,  research, 
expertise and other similar services, are 
considered  as  being  performed  on  the 
date  when  work  situations  are  issued, 
work  reports  and  other  similar 
documents,  on  which  ground  there  are 
established  the  performed  services  or, 
where  appropriate,  according  to  the 
contractual  provisions,  on  the  date  of  
their  acceptance  by  the  beneficiaries. 
However,  the  deduction  period  may  not 
exceed one year.  
  The  service  provision 
continuously performed, other than those 
mentioned  above,  such  as:  telephone 
services and other similar services, it is  
considered that the provision is made on 
the dates specified in the contract for the 
payment  of  the  provisioned  services  or 
on the date of issuing an invoice, but the 
deduction  period  may  not  exceed  one 
year.  
  For  the  operations  of  rental, 
leasing, granting and lease of goods, the 
service shall be deemed to be made at 
each time specified in the contract for the 
payment's execution.  
  For  the  service  provisions  for 
which the tax is due by the beneficiary of 
the services in  accordance  with the  art. 
150 paragraph (2), which are carried out 
continuously  for  more  than  a  year  and 
which  do  not  determine  deductions  or  
payments during that period, there shall 
be deemed of being made at the end of 
each  calendar  year,  as  long  as  the 
service provision did not terminate.  
 
5. The exchange rate used to 
determine the taxable base if the 
transaction is in a foreign currency 
 
It  is  applied  the  general  rule, 
respectively  the  latest  exchange  rate 
reported  by  the  National  Bank  of 
Romania of the date when it occurs the 
exigibility  of  the  tax  for  the  transaction 
hereof,  namely  the  exchange  rate 
reported  by  the  respective  bank  in  the 
previous  day  and  which  is  valid  for  the 
transactions that take place in next day.  
  If  advance  payments  are 
received before the service provision, the  
exchange  rate  used  to  determine  the 
taxable  base  of  VAT  collection  on  the 
date of receiving the advance payments 
will remain unchanged on the completion 
of  the  transaction,  respectively  when 
there  are  made  the  adjustments  of  the 
received advance payments.   
 
6. Documents to be drafted for these 
services 
 
  According to the art. 155 ind. 1 of 
the  Tax  Code,  for  the  intra-community 
procurements of services, the beneficiary 
being liable to pay tax, shall:  Year IX, No. 11/2010                                                                                                195 
1.  self-invoice  the  respective 
transactions no later than the 15
th day of 
the month following the occurrence of the 
generative  event,  if  he  is  not  in 
possession of the invoice issued by the 
provider.  
2.  self-invoice  the  amount  of  the 
advance  payments  paid  in  connection 
with the  respective transactions no later 
than the 15
th day of the month following 
that when he paid the advances, if he is 
not in possession of the invoice issued by 
the provider. Exception: when the event 
which generated the tax occurred in the 
same  month,  case  in  which  the 
provisions of section 1 apply.  
  Upon  the  receipt  of  the  invoice 
regarding the transactions referred to in 
section  1  and  2,  the  beneficiary  marks 
down on the invoice a reference to self-
invoicing, a reference to the invoice.  
  A  first  observation  that  must  be 
done, is that the transactions entered into 
the  self-invoices  will  be  included  in  the 
deduction  and  the  recapitulative 
declaration  for  the  month  preceding  the 
issuance  of  the  self-  invoice,  as  that 
month occurred the tax exigibility.    
  Also,  a  second  observation 
concerns the exchange rate used to draft  
the  self-invoice,  which  will  not  be  the 
exchange  rate  on  the  date  of  the  self-
invoice, but the exchange rate from the 
date of the tax exigibility.    
    
7. Conclusions 
 
  Therefore,  the  new  legal 
provisions  are  designed  to  simplify  the 
taxation of providing services from a VAT 
perspective. But we must recognize that 
although each EU member state will be 
subject  to  the  same  community 
legislation,  the  approaches  and  
interpretations of each EU member state 
may differ. 
 
 
 
 
Dobrinescu, L.  O singura regula, doua notiuni: sediul activitatii economice” si “sediul 
fix” , in Curierul Fiscal nr.12/2009; 
Gurdis, N.  Drept comercial român, Editura All Beck, Bucureşti, 2002; 
Teampau, A.  2010 –anul schimbarilor in TVA,  in Curierul Fiscal nr.9/2009; 
*****  Legea  nr.  571/2003  privind  Codul  Fiscal,    cu  modificarile  si 
completarile ulterioare; 
*****  HG nr. 44/2004 pentru aprobarea normelor metodologice de aplicare 
a Legii nr. 571/2003. 
 
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